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representative told Kommersant that while the company respects the decision, it does not agree with it. Once Tele2 receives the full text of the decision, the company will decide on further actions, according to Kommersant. As a reminder, the FAS issued a warning to Tele2 in June. According to the regulator, Tele2 had increased prices for more than 11mn subscribers by 10%. The regulator demanded that the tariffs be reduced to their previous levels, but Tele2 did not comply. As a result, the FAS opened a case against Tele2 on 20 July. That said, Tele2’s management insisted on Rostelecom’s 2Q20 conference call that the price increases were related to the 5% of tariffs that have not been revised since 2018 or have never undergone any kind of revision. The resulting increase in revenue was in line with the growth in the company’s expenses, according to Tele2.
On October 22, Rostelecom announced that it had signed a binding agreement to purchase 100% of Synterra Media​, an operator of national media services. Rostelecom will pay RUB 1.5bn via a deferred payment scheme that will depend on Synterra Media renewing its existing contracts. Synterra Media specializes in the ground delivery and distribution of media content. Russia’s largest TV production companies (Channel One Russia, VGTRK, NTV), subscription TV providers (Tricolor TV, Orion Express, NTV+), international media networks (Eurovision, MX 1, Telstra, Globecast), regional TV companies and radio stations use the services of Synterra Media. The company generated c. RUB 800mn in revenue with an EBITDA margin of over 40% in 2019, according to Rostelecom, implying that Synterra Media’s valuation is 1.8x for 2019 EV/sales and 4.7x for 2019 EV/EBITDA (assuming no net debt). We note that this is a bit higher than the levels at which Rostelecom trades (1.3x-3.7x for 2019 EV/sales and EV/EBITDA).
9.2.10 ​Utilities corporate news
Minority shareholders in the subsidiaries of Russian grid major Rosseti (Russian Grids) plan to switch to a unified share with the parent company ​in order to increase the liquidity and market capitalisation of their assets, ​Kommersant d​ aily reports. As reported by ​bne IntelliNews​, Rosseti recently got a boost to its outlook from its potential consolidation and ​pledge to improve dividends​. Its subsidiary FSK is already one of the best dividend payers in the Russian utility sector. Reportedly, the shareholders via the Association of Professional Investors requested that Prime Minister Mikhail Mishustin decide on the final structure of Rosseti as a holding company.
The electricity output of hydropower holding ​RusHydro​ declined by 3.5% year on year in 3Q20, ​while the 9M20 output overall still posted 14% y/y growth. As reported by ​bne IntelliNews,​ RusHydro was previously in focus, and helped by warm weather at the beginning of 2020​ it achieved the biggest share price gain in the sector, and had its ​investment case re-rated upwards by analysts​. But the most recent changes in the market environment were seen
147 ​RUSSIA Country Report​ November 2020 www.intellinews.com